Nuveen & Charles Schwab Join to Offer Honolulu Municipal Bonds to Individual Investors; Placement Declared a Success

Business Wire, Sept 24, 1996

IRVINE, Calif.--(BUSINESS WIRE)--Sept. 24, 1996--John Nuveen & Co. (NYSE:JNC) announced today the successful completion of a $100 million municipal bond issue for the City of Honolulu with Smith Barney as lead manager of the offering.

Nuveen partnered with Charles Schwab and Co. (NYSE:SCH), the San Francisco-based discount brokerage firm, in the placement of the bonds to individual investors.

Since the offering period began, with pricing on Sept. 19, more than $7.9 million was purchased by individual investors. More than 53% was placed with customers of Charles Schwab.

Clifton Fenton, vice president and manager of investment banking at Nuveen, said, "In this transaction, the City of Honolulu benefits from a significant increase in the participation of individual investors. These investors are attractive to Honolulu because they are traditionally long-term bondholders."

In most instances, municipal bond transactions are subscribed to by institutions leaving little opportunity for participation by individuals investors. However the Honolulu issue was structured so that individuals were given a five day advance period before it was opened to institutions.

During the offering period, Schwab brought the offering to the attention of Hawaii's million residents as well as to the residents of states with no or low state income tax (including Texas, Florida and Illinois.)

In the past, issuers have found placing bonds in the hands of individuals to be a challenge. Charles Schwab's involvement in this issue and two recent Nuveen transactions signal a trend to involve individual investors earlier in municipal offerings.

"Working with Nuveen has been a tremendous success for Charles Schwab," said James White, vice president of trading in Charles Schwab's fixed income department. "As a firm, Schwab is committed to offering our clients the full range of investment opportunities. Our alliance with Nuveen has afforded us the opportunity to extend competitive new issue offerings to retail customers."

Schwab is a leading financial services firm serving over 3.8 million active individual investor accounts with $220 billion in client equity.

Nuveen, founded in 1898, is headquartered in Chicago with offices in 12 other locations. Nuveen specializes in investment products and services for conservative investors and their financial advisers, as well as providing municipal and corporate investment banking services.

Since 1961, Nuveen has sponsored more than $61 billion in tax-free funds and trusts for more than 1,200,000 investors. The John Nuveen Co. is listed on The New York Stock Exchange and trades under the symbol "JNC."

CONTACT: Edelman Public Relations

Devereux Socas, 415/433-5381